A technology based solution to ease MRO buying process.

1. 06-Jun-17 1
Agenda
MRO Overview
Problem Statement
Solution
Product Features
Product Success and Long Term Growth
Prepared By:
Swarnadeep Mitra
MRO
Procurement

2. 06-Jun-17 2
MRO Overview
Why MRO procurement is so complicated?
When it comes to MRO, the user community typically has strong and emotional
attachments to their parts and suppliers. They have a much greater stake in
avoiding downtime and outages than in saving on inventory and adhering to
procurement process. It is not about x% savings; it is about keeping the line
running.
What is MRO procurement ?
The purchasing of spares for the daily maintenance, repair and operations
(MRO) of production and manufacturing equipment is often a complex, time
and resource consuming activity for most organizations. It is one which is critical
to maintaining continuity of production and avoiding costly downtime. MRO
costs are often overlooked as they do not form the part of the final product and
comprises of 20% of the total spend.

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MRO Overview
MRO Involves
A large spread
of items over
multiple sites
and categories
–
25000 – 50000 SKU’s
for a fortune 100
manufacturing
company
Unpredictable
demand –
For MRO items it is
difficult to predict
usage requirements.
70% of MRO items in
inventory are used 1-
2 times in two years,
only 1/3rd of the
products are repeat
purchases
A large number
of suppliers –
This makes it difficult
to find genuine and
authentic products,
as thousands of
sellers are quoting
the highest price
with no guarantee of
delivering a genuine
product.
De-centralized
MRO processes
–
Inconsistent
sourcing,
request/order,
duplication of
stockholding across
departments and
multiple site
locations. Limited
standardization of
manufacturers
and/or processes.
Maverick spend
–
Purchasing of a low
quality/higher priced
material than
otherwise
Spot buys –
Unplanned
purchases of items
not set up in
inventory, accounting
for more than 50% of
the annual spend
This is a common scenario across multi-site organizations where stock inventory is over-crowded with non-critical or
infrequently used items – risking obsolescence and stunting cash flow. In addition, they often bought more of an
item they already had in stock due to lack of visibility of the full inventory.

4. 06-Jun-17 4
Problem Statement
MRO procurement is a challenge for industries due to its unpredictable usage and extremely
short lead time requirement when demand arises. This result is suboptimal purchase –
 Procuring products at a high cost
 Procuring low quality/non-standardized products
Additionally cost incurred in processing purchase orders, transactions, invoices, payments, and
inventory increases with the frequency of procurement. While frequently procured item incur
costs in each and every order processed, infrequently procured items increase inventory cost
and tie up working capital.
The nature of the products and the sheer volumes of vendors make the task of comparing
(quotes, costs etc.) and procuring products along with determining the quality of products in a
short amount of time almost impossible.

5. 06-Jun-17 5
Solution
Access to price, quality, availability, and lead time of all existing MRO products (in form of a product
catalogue) in the market and an ability to compare them across vendors in a short time (in a matter
of few clicks) would provide the necessary information to procurement team on buying decision and
would resolve the problem of suboptimal purchase and lead to significant cost savings. This could be
achieved by developing an online MRO aggregator platform which would allow the users to –
Search for any
MRO product
they require
Compare the
cost, quality,
fitment, and
delivery time
of the MRO
product across
vendors
Buy the
product
directly from
the platform
Track delivery
to ensure the
products are
delivered as
requested
The MRO aggregator platform will be called as BuyMRO.COM

6. 06-Jun-17 6
Solution
Stakeholders Objectives
Shop floor workers
 Access to MRO tools as and when required
 Avoid downtime and maintain business continuity
 Raise request for items when
 They are out of stock
 They are required as determined by the user
Procurement team
 Buy products and services at the right price, from the
right source, at the right specification that meets users’
needs, in the right quantity, for delivery at the right time,
to the right user at the minimum cost.
Local Suppliers Vendors
 Expand their business and maximize profit. They form an
important part of the ecosystem
The MVP would allow the procurement of items in all totality by providing an end to end
integration between shop-floor workers, procurement team and suppliers. This can be best
understood by mapping a journey through the platform based on the user’s job.
BuyMRO.COM
The online aggregator platform should be designed as such so as to facilitate the user to
perform the actions described above. In context of the procurement process the main users
of the platform can be classified as:

7. 06-Jun-17 7
Solution
Assumptions
•Here the users refer to employees in procurement and shop-floor and manager of employees.
•There will only be one account in BuyMRO.COM per corporate – The corporate e-mail id will be used to create the account, the delivery address and payment preference
(net banking, credit card, cash, etc.) would be set and would be the same of all orders made by employees.
•As it is a B2B setup – the users will be allowed to login to the BuyMRO.COM website/mobile application using the official e-mail id through federation.
•The employee hierarchy would be mapped to BuyMRO.COM so as to facilitate the approval process.
•Shop floor workers are only required to choose an item for purchase, they are not allowed to make the purchase
•Purchase of material is initiated after the supervisor of the shop floor worker approves the purchase
•Purchase of materials could have been approved by procurement team, so as to aggregate demand from multiple departments and thus reduce price of the total
purchase, however this is not taken into account due to the following constraints –
•This would lead to increase in lead time of the purchase
•The supplier may not be able to deliver the items all the departments that requested for the MRO product
•Only procurement team can see the list of all the purchases – purchase history and current purchases
•Shop floor workers and their supervisors can only check the status of their purchases and their approved purchases respectively.
•The purchased products are delivered to the procurement team with help of 3rd party logistics providers as the local suppliers may not have the scale to sustain delivery.
Moreover as the products are purchased from BuyMRO.COM the primary accountability of meeting the SLA would be upon BuyMRO.COM
•Any defect in items would be identified and return of items would be initiated by the procurement team
•Items would be returned only because of physical damage and the same lot would be again re-ordered from the same manufacturer
•Set of assumptions need to be enhanced by doing some user (stakeholders) study and interviews in terms of streamlining their benefits from this ecosystem. Because only
then can we expect this model to sustain.
A sample procurement mechanism would work as such:
Employee A notices requirement of safety gloves in a warehouse and requests new ones via the BuyMRO.COM
website/mobile app, his/her will receive an alert at the top of the BuyMRO.COM page (if he/she is logged in to the
website) or a push notification on the BuyMRO.COM mobile app on his mobile device, asking him to approve the order. As
soon as he does, BuyMRO.COM processes the order and updates the employee A of the order’s status in mobile or
desktop application. BuyMRO.COM also notifies the employee when the order is shipped.

8. 06-Jun-17 8
Product Features
The product features which will help BuyMRO.COM to meet the objectives of –
 Cost reduction and
 Quality procurement - The platform will enable discoverability
Can be best defined in terms of user journey and the steps the users will take in BuyMRO.COM to achieve the desired
objectives.
For a shop floor worker the most important need is availability of MRO tools as and when required
Shop Floor Worker User Journey:
Persona
 Hard worker
 Skilled in manufacturing process
 May not be technology and internet savvy
 Has a very specific preference of tools
 Understands the need of tools and want them available as and when
required
 Used to a specific process of ordering item
Identify the requirement of a
MRO tool
•Specify wether it is
unavailable or has reached
the minimum stocking
quantity
Order the MRO tool
• Raise an order for the MRO
tool with the following
information
• Number of items required
• Specification of the items
required
• Acceptable lead time and
acceptable variations in
specifications so as to
quantify the quality of the
product being delivered
Check for delivery
• Check for approval of the
request raised
• Check for the delivery status
of the required tool
•Get notified when the tool is
available in the warehouse
Get Delivery Status
•Recieve notification of
successful delivery and
availability of item in ware
house
•Receive notification of a
rejection and subsequent
order of the materials
A simple user journey for a shop floor worker can be construed as:

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Product Features
The product features to support the user journey would require
• Search bar – Search via product name, description, ID etc.
• Product listing – Price, Availability, Rating, High quality image
• Product selection – Adding to cart for approval, specifying the importance/urgency, submission for approval
• Notification icon – which opens a popup listing the latest notifications (for approval status, tracking status, delivery status, return status etc.
Product requirement
•With BuyMRO.COM shop floor workers would be able to search for the exact tools (filtered by name, specification,
quality, cost and delivery time) that they require for work. After search the user would be able to view the details of
each product with high quality image/videos along with detailed product description that are deemed important for the
user. Users can then select a specific product, specify the quantity and request for approval; the user would also have an
option to specify the importance so that the same can be notified to the approver. After the item is approved the user
will get a notification for the same and would then be able to see the order status. The user will be notified once the
order is out for delivery and will be notified again once the item is available in ware house.
•In case the product is rejected the user will get a notification and a new order would directly be raised by the
procurement team for the same item from the same vendor.

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Product Features
A user journey for procurement team can be divided into two parts -
Persona
 Adept in vendor research and due diligence.
 Skilled in vendor comparison and negotiation.
 Technology and internet savvy.
 Have very specific needs with regard to
procurement – quality, cost etc.
 Understands the need of correct procurement
procedures and its impact on bottom line.
Procurement Team User Journey:
For a procurement team the most important need is procuring the best
possible item at the least possible price at the exact time of need.

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Product Features
Selecting items/vendors for procurement
Explore MRO Items
• Search for MRO items
in BuyMRO.COM based
on:
• Specification
• Cost
• Availability
• Suitability
Get additional details
• Request for additional
details from suppliers:
• Quotes
• Product Queries
• Information on bulk
orders etc.
Finalize MRO Items
• Select the items and
vendors to be made
available for
procurement
This would be an ongoing process, the frequency of which can be determined based on business requirements. There
could be multiple ways to continue vendor selection the suitability of which can be decided on company to company basis
The product features to support the user journey would require
•Search bar – Search via product name, description, ID etc.
•Product listing – Price, Availability, Rating, High quality image
•Product Description – ad-hoc product availability, technical specs, image zoom, contract pricing, manufacturing model, and shipping weight etc.
•Product Comparison – Comparing product with respect to features, prices etc. to get the best fit
•Additional Information – Request additional information from suppliers regarding products
•Product Selection – Ability to select products and vendors to be made available for procurement processs
•Notification icon – which opens a popup listing the latest notifications (for availability of new items, vendors, increase/decrease of prices, new offers etc.)

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Product Features
Tracking purchases and initiating returns
Check MRO items for
defects in delivery
• Check MRO items
for defects as
mentioned
against item
description
during purchase
Create return
request
• Create a return
request by
selectin the
defective item
Track return and
refund status
• Track the
shipment of
returned item
and refund status
Re order
• Re order the
same items from
the same vendor
The product features to support the user journey would require
• Selecting product for return
• Return Reason – Reason for which the product is being returned
• Notification icon – which opens a popup listing the latest notifications (for supplier acceptance for
return, return tracking, refund status etc.)
• Re-order – Re-order the lot from the same vendor

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Product Features
To Summarize
•Real time price comparison of products while making a purchase would enable the maximum value for moneys
•Quality of products, as indicated by ratings (in the product description) and user reviews would enable users to choose
the best product (in consideration with the price).
•Moreover BuyMRO.COM would ensure that only certified vendors are on-boarded into the platform and along with the
rating and review system will ensure the self-selection of vendors for the procurement team.
Explore MRO Items
• Search for MRO items in BuyMRO.COM based on:
• Specification
• Cost
• Availability
• Suitability
Get additional details
• Request for additional details from suppliers:
• Quotes
• Product Queries
• Information on bulk orders etc.
Finalize MRO Items
• Select the items and vendors to be made available for
procurement
Identify the requirement of a MRO tool
• Specify wether it is unavailable or has reached the
minimum stocking quantity
Order the MRO tool
• Raise an order for the MRO tool with the
following information
• Number of items required
• Specification of the items required
• Acceptable lead time and acceptable variations
in specifications so as to quantify the quality of
the product being delivered
Check for delivery
• Check for approval of the request raised
• Check for the delivery status of the required tool
• Get notified when the tool is available in the
warehouse
Get Delivery Status
• Recieve notification of successful delivery and
availability of item in ware house
• Receive notification of a rejection and subsequent
order of the materials
Check MRO items for defects in
delivery
• Check MRO items for defects as
mentioned against item description
during purchase
Create return request
• Create a return request by selectin
the defective item
Track return and refund status
• Track the shipment of returned
item and refund status
Re order
• Re order the same items from the
same vendor
End to End MRO Procurement Process

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Product Success and Long Term Growth
Product Success
The only criterion for product’s success is it’s measurement against a specific objective. Assuming the objective of the product is to help users
move from offline procurement to online mode – a metric that would help us evaluate if the objective is met would be ‘Number of
transactions’
Number of Transactions would also form the criteria for measuring product features – as it is the product feature that helps the user in
performing a transaction (For e.g. placing an order for a MRO item).
The inability to perform a transaction at any point of time would lead to a drop off. An evaluation of the stage at which drop off happens
would give an idea if the product feature is successful or not. Additionally product features not used in the transaction process or rarely used
would also provide insight into the success of the feature.
Feature Prioritization
As such any new development of product features would be prioritized based on its ability to meet the business objective as defined
beforehand and would also factor in two most important resources:
 Cost and
 Time
Additional factors such as market requirements, product positioning w.r.t competitor also plays a role in defining and prioritizing product
features.
Product Growth
Continuing with the objective of increasing ‘Number of Transactions’ – on a long term this can be achieved in two ways
 Increasing the number of products available online
 Focus on providing products that are bought frequently
An increase in the number of products would lead to expansion of BuyMRO.COM in different industries, laboratories etc. increasing the
number of transactions made in the platform, where as a focus on frequently used items would make sure that users return to BuyMRO.COM
on a regular basis to procure items thereby increasing the number of transactions made